Three candidates placed their bids Thursday in the final round to select a buyer for struggling and scandal-plagued Kanebo Ltd. and Kanebo Cosmetics Inc., now managed by the government-backed Industrial Revitalization Corp. of Japan.

The bidders are a consortium made up of cosmetics maker Kao Corp., MKS Partners Ltd. and two investment funds; Daiwa Securities SMBC Co. and Belgium-based RHJ International, a holding company for the U.S. investment fund formerly called Ripplewood Holdings LLC; and a team made up of Jafco Co. and British investment fund CVC Capital Partners Ltd.

Kao had originally planned to merge with Kanebo before they decided to seek government help in February 2004.

IRCJ will consider the bids and business plans submitted by the three groups and is expected to make a final decision by mid-December.

The long bidding process is designed to allow any window-dressing in Kanebo's previous financial statements to come to light, an IRCJ official said. It also puts IRCJ in a position to secure the best possible offer by having suitors bid against each other, he said.

The search for such an attractive offer has been hampered Kanebo's history of fraudulent financial reporting, actions that eventually brought down a company that was once a leading textile and cosmetics maker.

Kanebo's former president, Takashi Hoashi, and former vice president, Takashi Miyahara pleaded guilty earlier this week to hiding capital deficits in fiscal 2001 and 2002.

Bidders have complained that IRCJ has not been forthcoming about disclosing financial information on the company.

On the eve of Thursday's bidding, a team comprising Kose Corp. and Nikko Principal Investments Japan Ltd., which was one of the four groups selected in September's second tender, withdrew from the final round of bidding.

The team made the decision after its request to IRCJ to postpone the final tender was rejected, according to sources. Kose and Nikko Principal had reportedly argued that the information disclosed by Kanebo regarding its past business practices was insufficient to allow the team to determine an appropriate bid.